Best bookkeeping practices for businesses

Bookkeeping is a must for every business since accounting being one of the main aspects that proves the legality of a business. As with all things, there are best practices and then there are practices that don’t hold water.  Ensuring good bookkeeping practices involves a lot more than just tally prime download and use or hiring an accountant. The following article includes some tips from different sources including articles from other bookkeepers on how they achieve success. As with most things, practice makes perfect so hopefully these tips will help you put them into practice in order to effectively track your earnings, expenses and more.

1. Separate your personal and business finances

This is one of the best practices you can do to ensure that your bookkeeping system is working properly. You’ll want to keep track of all personal expenses, including those related to your business, and make sure that they don’t appear in your business books. You can also set up a separate bank account for your personal funds, which will help you keep track of them better. This ensures that you don’t get confused and end up paying bills for things you don’t need to pay for. It will also allow you to give an accurate picture of the financial health of the company at any point.

2. Establish internal control

Internal control is one of the most critical aspects of business success, as it allows you to monitor your business closely and identify any potential problems before they become major issues.  If you don’t, you’ll be susceptible to fraud and other financial crimes.

In a nutshell, internal control is the process of establishing, implementing and enforcing policies that help ensure that accounting records are accurate and reliable. You can use internal control to improve the accuracy of your accounts by ensuring that all transactions are recorded accurately and in accordance with company policy. Establishing internal controls requires planning ahead by setting up systems that will ensure the effective operation of your business. This includes developing an inventory system so that you can track stock levels, creating a payroll system so that you can calculate taxes, recording all transactions in a journal or ledger, and maintaining proper records for each employee.

Establishing internal control is essential for any business, and is essentially the responsibility of the bookkeepers.

An internal control system should include:

3. Using accounting software to track expenses

Using accounting software is a great way to keep track of your finances and expenses. It will allow you to easily categorize your transactions, making it easier for you to report on the results of your business’ operations. Accounting software also allows you to save time by automatically entering information into your spreadsheet or database. If you use an accounting software you will greatly reduce errors in your accounting calculations and this will be greatly helpful when you deal with banks or the income tax department.

The most important thing that a bookkeeper can do for you is to help you manage your cash flow by recording all of your receipts and expenses. A software like the tally prime helps you with this process by automatically recording your transactions and organizing them in the right categories. Plus, it’s easy to set up recurring transactions so they don’t have to be done manually each month.

4. Going paperless

If you want to save money on paper, then going paperless is one of the best things you can do for your business. It doesn’t matter if you’re still keeping paper records or not; what matters is how much time and money you’ll spend in the future if you continue to use paper files as opposed to digitizing everything into a computer database. Its also the more secure way to keep your documents.